Correlation Between Bina Darulaman and HeiTech Padu
Can any of the company-specific risk be diversified away by investing in both Bina Darulaman and HeiTech Padu at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bina Darulaman and HeiTech Padu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bina Darulaman Bhd and HeiTech Padu Bhd, you can compare the effects of market volatilities on Bina Darulaman and HeiTech Padu and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bina Darulaman with a short position of HeiTech Padu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bina Darulaman and HeiTech Padu.
Diversification Opportunities for Bina Darulaman and HeiTech Padu
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bina and HeiTech is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bina Darulaman Bhd and HeiTech Padu Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeiTech Padu Bhd and Bina Darulaman is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bina Darulaman Bhd are associated (or correlated) with HeiTech Padu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeiTech Padu Bhd has no effect on the direction of Bina Darulaman i.e., Bina Darulaman and HeiTech Padu go up and down completely randomly.
Pair Corralation between Bina Darulaman and HeiTech Padu
Assuming the 90 days trading horizon Bina Darulaman is expected to generate 14.0 times less return on investment than HeiTech Padu. But when comparing it to its historical volatility, Bina Darulaman Bhd is 1.81 times less risky than HeiTech Padu. It trades about 0.02 of its potential returns per unit of risk. HeiTech Padu Bhd is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 86.00 in HeiTech Padu Bhd on September 2, 2024 and sell it today you would earn a total of 235.00 from holding HeiTech Padu Bhd or generate 273.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.77% |
| Values | Daily Returns |
Bina Darulaman Bhd vs. HeiTech Padu Bhd
Performance |
| Timeline |
| Bina Darulaman Bhd |
| HeiTech Padu Bhd |
Bina Darulaman and HeiTech Padu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bina Darulaman and HeiTech Padu
The main advantage of trading using opposite Bina Darulaman and HeiTech Padu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bina Darulaman position performs unexpectedly, HeiTech Padu can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HeiTech Padu will offset losses from the drop in HeiTech Padu's long position.| Bina Darulaman vs. Malayan Banking Bhd | Bina Darulaman vs. Public Bank Bhd | Bina Darulaman vs. Petronas Chemicals Group | Bina Darulaman vs. Tenaga Nasional Bhd |
| HeiTech Padu vs. YTL Hospitality REIT | HeiTech Padu vs. YX Precious Metals | HeiTech Padu vs. DC HEALTHCARE HOLDINGS | HeiTech Padu vs. Malayan Banking Bhd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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